STRATEGIC PRIORITY: Economic Development
AGENDA DATE: June 14, 2023
COUNCIL DISTRICT(S):|910|DEPARTMENT: Office of Economic Development
EXECUTIVE: Majed Al-Ghafry
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SUBJECT
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Authorize a New Markets Tax Credit transaction between the Dallas Development Fund and its subsidiaries, JPMorgan Chase and its subsidiaries, and Vogel Alcove, and its affiliates for interior construction of a new childcare facility at 3662 Camp Wisdom Road - Financing: No cost consideration to the City
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BACKGROUND
The City of Dallas authorized the creation of the Dallas Development Fund (DDF), a non-profit Community Development Entity (CDE), by Resolution No. 09-0461 on February 11, 2009, to apply for a New Markets Tax Credit (NMTC) allocation from the U.S. Department of Treasury's Community Development Financial Institutions Fund in its 2009 funding cycle. DDF was most recently awarded $55 million in the 2021 allocation cycle, and was previously awarded $185 million in allocation from the 2009, 2012 and 2014, 2017 cycles. DDF has closed $185 million in allocation to date.
The NMTC program permits taxpayers (generally corporate) to receive a credit against federal income taxes for making qualified equity investments in designated CDEs. These investments must be used by the CDE for projects and investments in low-income communities, as defined by the NMTC Program. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period.
On April 24, 2023, DDF considered and approved a NMTC transaction between DDF, JPMorgan Chase (Chase), and Vogel Alcove (Sponsor). This NMTC allocation will use up to $6 million of DDF's $55 million NMTC allocation. Chase is anticipated to provide a total of approximately $1.8 million in NMTC equity to support the $6 million in total allocation from DDF.
The Sponsor is constructing an interior finish-ou...
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